TBLI Weekly - October 10th, 2023


TBLI Weekly - October 10th, 2023

Your weekly guide to Sustainable Investment

Upcoming featured TBLI Talk:

Barney Swan will share his solutions of Regenerating Nature in Australia.

Through a regenerative portfolio, Barney accelerates natural capital, science education, and ClimateTech opportunities. Founder of Australian charity ClimateForce, he currently leads off-grid Research and Development projects around biodiversity, innovation and agriculture solutions. The leading project Tropical Regen is within the world's oldest rainforest, Daintree. Barney has managed complex expedition programs in 8 countries, including the Arctic, Tanzania, South Atlantic and Patagonia. He is highly adaptive within corporate, institutional and remote environments thriving alongside diverse cultures.

In this TBLI Talk we'll discuss:
  • Next generation of biodiversity and natural capital modelling
  • Blended finance pathways for unlocking trillions
  • Creating an off-grid blueprint for social resilience

TBLI Better World Prize voting deadline - October 31st

Vote for the TBLI Better World Prize & receive a free pass to any upcoming virtual TBLI event
send an email to This email address is being protected from spambots. You need JavaScript enabled to view it. with the event you wish to attend

TBLI Hero of the month

''I often get asked how is it possible for TBLI to do so many activities with such a small team- TBLI Weekly, regular summits, Investor Salon, Better World Prize, Spotlight Interview, Master Classes, etc. One of our best-kept secrets is the genius of Samuel Rubinstein. Sam has been working behind the scenes since 2018. Prior to that, he was a volunteer for many years. The reason that everything gets done and runs so smoothly is because of Sam's incredible dedication. He rarely likes to take the spotlight but is totally driven by values, authenticity, and humor. He is a brilliant, kind soul, who is always innovating and challenging TBLI to do more, and more effectively. Soon, Sam will be moving to Hong Kong for a new chapter in his life and he will be helping us change the financial system so it works for all stakeholders, there. Thank you for being a true mensch. Big hug from one of your biggest fans.'' - Robert Rubinstein

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Central Banks Are Waging War On Renewables

By: Mark Le Dain - Forbes

In recent years, central bankers globally added climate change to their mandate. Or at least to their talking points. A 2021 survey revealed that 63% of central bankers believe climate change fits within their purview. Members of the European Central Bank even declared the battle against climate change a “core duty.” With this promising stance, environmentalists eagerly anticipated a wave of support from these institutions.

However, fast forward a few years, and things have taken a turn. Central banks have rapidly hiked interest rates, and it's the renewable sector that is the most impacted. Multiple renewable companies, including Brookfield Renewable Corp, Algonquin Power, and NextEra EnergyNEE -1.8%, are witnessing their stocks hit 52-week lows in the last few weeks.

Some of the benefits of renewables are the exact things that make them more susceptible to this hiking cycle. Historically, the long lifespan of renewable assets was a boon. Yet in this high discount rate environment, the value of these assets diminishes. In stark contrast, oil and gas assets, especially shale wells that realize over half their value in the initial year, are less impacted by discounting. The quick returns these traditional energy sources provide are more shielded from the repercussions of rising discount rates. Not only are shorter-duration oil and gas assets worth more but the high rates are keeping out new competing energy supplies.

Another formidable challenge for the renewable industry is the heightened carry cost stemming from these high interest rates. Although renewable projects have always grappled with a stringent permitting process, it was manageable when the cost of capital was minimal. This is probably one of the reasons the industry got comfortable with some obscene permitting timelines because people cared less when the time value of money was negligible. However, with rising interest rates, prolonged evaluation periods have emerged as deadly to the financial viability of these projects. As a testament to these challenges, Vattenfall AB recently shelved a wind farm project off Britain’s coast, and EDF Renewables called off a solar venture in Ohio, citing escalating costs.

The knock-on effects don’t stop at proposed assets. Renewables’ major developers are witnessing shrinking cash flows on legacy assets as higher debt service costs eat up more of the cash flows. They simply have less to invest in future supply. It has gotten to the point that investors, observing the financial strain, are advocating not just for a pause in expanding renewable portfolios, but even selling off renewable assets. A case in point is Algonquin Power, currently under investor pressure to sell the entire renewables portfolio.

It raises the question: How long will this trend persist? At present, it's evident that renewable energy pioneers are facing headwinds, while traditional energy sectors enjoy a resurgence. The ironic twist is that higher rates resulting in less supply, and higher energy costs, might inadvertently prolong the battle against inflation.

Read full article

Climate crisis costing $16m an hour in extreme weather damage, study estimates

By: - The Guardian

Analysis shows at least $2.8tn in damage from 2000 to 2019 through worsened storms, floods and heatwaves

The damage caused by the climate crisis through extreme weather has cost $16m (£13m) an hour for the past 20 years, according to a new estimate.

Storms, floods, heatwaves and droughts have taken many lives and destroyed swathes of property in recent decades, with global heating making the events more frequent and intense. The study is the first to calculate a global figure for the increased costs directly attributable to human-caused global heating.

It found average costs of $140bn (£115bn) a year from 2000 to 2019, although the figure varies significantly from year to year. The latest data shows $280bn in costs in 2022. The researchers said lack of data, particularly in low-income countries, meant the figures were likely to be seriously underestimated. Additional climate costs, such as from crop yield declines and sea level rise, were also not included.

The researchers produced the estimates by combining data on how much global heating worsened extreme weather events with economic data on losses. The study also found that the number of people affected by extreme weather because of the climate crisis was 1.2 billion over two decades.

Two-thirds of the damage costs were due to the lives lost, while a third was due to property and other assets being destroyed. Storms, such as Hurricane Harvey and Cyclone Nargis, were responsible for two-thirds of the climate costs, with 16% from heatwaves and 10% from floods and droughts.

The researchers said their methods could be used to calculate how much funding was needed for a loss and damage fund established at the UN’s climate summit in 2022, which is intended to pay for the recovery from extreme weather disasters in poorer countries. It could also rapidly determine the specific climate cost of individual disasters, enabling faster delivery of funds.

“The headline number is $140bn a year and, first of all, that’s already a big number,” said Prof Ilan Noy, at the Victoria University of Wellington in New Zealand, who carried out the study with colleague Rebecca Newman. “Second, when you compare it to the standard quantification of the cost of climate change [using computer models], it seems those quantifications are underestimating the impact of climate change.”

Noy said there were a lot of extreme weather events for which there was no data on numbers of people killed or economic damage: “That indicates our headline number of $140bn is a significant understatement.” For example, he said, heatwave death data was only available in Europe. “We have no idea how many people died from heatwaves in all of sub-Saharan Africa.”

Read full article

This under-the-radar MISO proposal will hurt renewables, boost gas

MISO is bringing back the “Reliability System Attributes” proposal to stakeholders after a brief hiatus. The renewable energy industry must pay attention even though other near-term priorities like MISO’s queue reform package are on the horizon because the primary beneficiary of MISO’s attributes framework will be the natural gas industry.

In addition to the increased study deposits and milestone payments, it is understandable for renewable developers to focus on MISO’s resource accreditation method for renewables. But renewable developers will regret not engaging MISO in the discussion of attributes because the grid operator’s current proposal signals the need for natural gas, not clean dispatchable resources like energy storage or providers of demand flexibility.

MISO’s current attributes proposal misses the connection between load interconnections and higher penetrations of renewables. That missing connection is why renewable developers must pay close attention to the discussion of the attributes before it is too late.

MISO’s attributes proposal is being resurrected

Close observers might recall a former MISO executive’s statement at a state commission hearing in 2022 that natural gas is the only fuel that fits the attributes MISO needs in the future.

“Today, the only thing that we’re aware of that would provide those attributes are gas units,” said the former MISO Executive in this news article. After antagonizing stakeholders last fall with a new seasonal capacity market proposal, attributes discussion, and capacity accreditation for non-thermal resources, MISO took a breather. This fall, MISO is back with its attributes proposal and has engaged the energy consultancy Brattle Group to make its case to the natural gas industry.

By most accounts, MISO pulled off a decent seasonal capacity auction for the first time in 2023. In this “Reliability System Attributes” framework, MISO says it needs ramp-up capability and rapid start-up to ensure flexibility to serve reliability needs in the future. But MISO fails to realize that it is sitting on energy storage waiting to be studied in the queue that offers both those attributes.

Why does MISO not make a case at FERC to study storage ahead of other resources if it anticipates flexibility needs in the future? If solar is not dispatchable and not flexible, energy storage fills that need. MISO is signaling the gas industry as the only resource that fits those attributes unless the demand flexibility providers, such as crypto miners and renewable developers join forces.

How Much Will EU Carbon Price Impact Things That Use Natural Gas Like Electricity, Cement, & Methanol?

By: - CleanTechnica

The energy crisis in Europe continues to diminish as prices return to something approaching useful. Cleantech investor and co-host of Redefining Energy Gerard Reid pointed out that natural gas prices were off 80% in nine month, and wondered if they might approach zero.

I wondered what the impact of the EU emissions trading scheme (ETS) budget guidance would be. I recently looked through the guidance through 2050, noting that it turned into US$203 per ton of CO2 in 2030 in 2023 dollars, $287 in 2050 and $296 in 2050, roughly aligned with the social cost of carbon that Canada and the US EPA agree on. I did a quick so-what comparison between the impact on a notional wind farm and natural gas plant, and any gas plant operating in 2035 would have be running a tiny percentage of the time and getting very big money for their electricity to break even.

But I hadn’t really done a per-commodity assessment until this comment and thought it would be interesting. I picked wholesale electricity prices per MWh, the cost of cement per ton and the cost of methanol per ton.

At present, those commodities have the following recent average EU wholesale prices. A MWh at $129. A ton of cement at $117. A ton of methanol at $398.

This is natural gas-focused and each of those commodities has a primary pathway for its creation which uses natural gas. Electricity is generated in natural gas generation units which emit about 0.4 tons of CO2 for every MWh, along with 0.2 tons of CO2e from leaking methane in Europe (more in the USA, even more in many other parts of the world).

Cement uses natural gas to heat the limestone kilns and clinker drum. It takes 4,982,000 btu of natural gas per ton of cement. At 36,303 btu per cubic meter and 0.76 kg per cubic meter of natural gas, that’s just over 0.1 tons of natural gas. When that burns, it creates just under .3 tons of CO2. That of course comes with a chaser of leaking methane, about 0.14 tons of CO2e. For this effort I’ll ignore the roughly double CO2e emissions from the limestone to quicklime process and focus on the easy pickings of natural gas for heat.

Methanol is at a whole new level. Methanol is made from natural gas and is up to 1.5 tons of CO2 per ton of methanol, along with another methane leakage chaser of perhaps 0.4 tons.

Today the EU ETS doesn’t apply to methane and other carbon dioxide equivalents like NOx. In 2026, it will. And that’s when the carbon border adjustment mechanism will kick in and all of the embodied CO2 and CO2e in imported goods will be priced as if they were manufactured in the EU. The world’s third largest economy is effectively applying a carbon price to every country that exports to it from anywhere in the world, which is to say almost all of them.

At the EU’s current ETS price point of $96, electricity generated from natural gas should cost an extra $36. Every ton of cement should cost an extra $47 just for the portion of emissions from the use of natural gas (and about double that due to CO2 from the limestone to quicklime process). Each ton of methanol should cost an extra $247.

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Microplastics detected in clouds hanging atop two Japanese mountains

By: - The Guardian

Findings regarding clouds above Mount Fuji and Mount Oyama highlight how microplastics are highly mobile

Microplastics have been found everywhere from the oceans’ depths to the Antarctic ice, and now new research has detected it in an alarming new location – clouds hanging atop two Japanese mountains.

The clouds around Japan’s Mount Fuji and Mount Oyama contain concerning levels of the tiny plastic bits, and highlight how the pollution can be spread long distances, contaminating the planet’s crops and water via “plastic rainfall”.

The plastic was so concentrated in the samples researchers collected that it is thought to be causing clouds to form while giving off greenhouse gasses.

“If the issue of ‘plastic air pollution’ is not addressed proactively, climate change and ecological risks may become a reality, causing irreversible and serious environmental damage in the future,” the study’s lead author, Hiroshi Okochi, a professor at Waseda University, said in a statement.

The peer-reviewed paper was published in Environmental Chemistry Letters, and the authors believe it is the first to check clouds for microplastics.

The pollution is made up of plastic particles smaller than five millimeters that are released from larger pieces of plastic during degradation. They are also intentionally added to some products, or discharged in industrial effluent. Tires are thought to be among the main sources, as are plastic beads used in personal care products. Recent research has found them to be widely accumulating across the globe – as much as 10m tons are estimated to end up in the oceans annually.

Humans and animals ingest or inhale large amounts of microplastics, which have been detected in human lungs, brains, hearts, blood, placentas, and feces. Their toxicity is still being studied, but new research that exposed mice to microplastic points to health issues, like behavioral changes, and other studies have found links to cancer and irritable bowel syndrome.

Waseda researchers gathered samples at altitudes ranging between 1,300-3,776 meters, which revealed nine types of polymers, like polyurethane, and one type of rubber. The cloud’s mist contained about 6.7 to 13.9 pieces of microplastics per litre, and among them was a large volume of “water loving” plastic bits, which suggests the pollution “plays a key role in rapid cloud formation, which may eventually affect the overall climate”, the authors wrote in a press release.

Read full article

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